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Employment Tribunal fees shock!

Posted on Thursday, July 27th, 2017

Published by MrFinch

You will inevitably have heard by now that the Supreme Court today ended 4 years of legal challenge by Unison when it declared the requirement, introduced in 2013, for a claimant to pay a fee before commencing tribunal proceedings, was in fact, as Unison has always maintained, illegal.

Given Unison had failed at the High Court and at the Court of Appeal, most practitioners didn’t see this result coming! I don’t propose to examine their Lordships reasoning, but instead to look at what this might mean in practice for employers going forward. Although the MOJ are now in the midst of refunding fees paid by Claimants (said to be around £27m) I wouldn’t assume we have necessarily seen the end of tribunal fees altogether.

Most commentators believe the Government will re-group and attempt to introduce a new fee scheme (legally this time rather than simply by Ministerial Order as last time!). However, given the scathing comments about the effect of the present scheme on restricting access to justice, any new scheme will surely be less “draconian” (ie cheaper) than the requirement to pay up to £1200 as in the old regime. The Government face the additional problem of whether, post-election, they have the ability to get any such new legislation through onto the statute books.

Whether there will be a watered-down fee scheme or no scheme at all, it must be a realistic assumption that employers will statistically be more likely to become embroiled in a tribunal at some point. Reliable data suggests in round terms the effect of introducing fees was to reduce tribunal claims by 70%. Logically therefore we now face an increase of up to 70%!

What should employers now do?

More than ever it must be vital to make sure your HR/employee relations house is in order! Taking advice from your employment lawyer at key points will mean that whilst you can rarely stop a claimant bringing a claim, you do maximise your chances of being the winning party!

Also, a tribunal has always had the power to award costs, for example where it believes a claim had no reasonable prospect of success. In my view it is now all the more important that employers lawyers try to use this power more effectively by issuing cost warning letters where appropriate (and early in the proceedings) to claimants or their advisors.

One would hope that if we are now going back to the days where claimants sometimes brought speculative cases that were without too much merit, tribunals in turn will become more receptive to cost applications when those ill-judged cases inevitably fail.

Employers have always been able to apply for insurance to cover tribunal awards and associated legal costs and whilst that peace of mind inevitably comes at a cost, it may be if we are to see a return to pre-2013 numbers of cases, such insurance is worth looking at.

If you have any queries or if I can assist with any HR or employment law issue I am of course always available for a call on 03333 232 322.